ONEOK INC /NEW/
S-8, 1999-06-18
NATURAL GAS TRANSMISISON & DISTRIBUTION
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<PAGE>   1
                                                     Registration No. 333-______
- --------------------------------------------------------------------------------
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 18, 1999.
- --------------------------------------------------------------------------------


                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                    FORM S-8
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933

                               ------------------


                      ONEOK, Inc. Long-Term Incentive Plan

                               ------------------


                                   ONEOK, INC.

                  100 West Fifth Street, Tulsa, Oklahoma 74103
      (Name of the issuer of the equity securities being offered pursuant
              to the Plan and the address of its principal office)

          OKLAHOMA                                               73-1520922
(State or other jurisdiction of                                (IRS Employer
Incorporation or organization)                               Identification No.)

         JIM KNEALE                                           DONALD A. KIHLE
Vice President, Chief Financial                               Gable & Gotwals
   Officer and Treasurer                                   100 West Fifth Street
         ONEOK, Inc.                                            Suite 1000
   100 West Fifth Street                                   Tulsa, Oklahoma 74103
   Tulsa, Oklahoma 74103                                       (918) 585-8141
      (918) 588-7000

         (Name, addresses, and telephone numbers of agents for service)

                               ------------------


Appropriate date of commencement of proposed sale pursuant to the Plan: from
                  time to time after the effective date hereof

- --------------------------------------------------------------------------------

                         CALCULATION OF REGISTRATION FEE

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                     Proposed          Proposed
                                                     Maximum           Maximum
                                                     Offering          Aggregate                 Amount of
Title of Securities        Amount to be              Price             Offering                  Registration
to be Registered           Registered(1)             Per Unit(2)       Price(3)                  Fee


- --------------------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------------
<S>                        <C>                       <C>               <C>                       <C>
Common stock,
$0.01 par value            1,445,200                 $ 29.96875        $ 43,310,837              $ 12,040

- --------------------------------------------------------------------------------------------------------------
</TABLE>

Exhibits Index on Page 5.



<PAGE>   2

(1)      Represents the estimated maximum amount of common stock of ONEOK, Inc.
         (hereinafter referred to as "Common Stock") which could be acquired
         under the ONEOK, Inc. Long-Term Incentive Plan (hereinafter referred to
         as the "Plan") either directly from ONEOK, Inc. (hereinafter referred
         to as the "Company"), or from purchases in the open market during the
         years of operation of the Plan.

(2)      Based on price of $ 29.96875 per share of the Common Stock, the average
         sales price of the Common Stock published in the Wall Street Journal
         reports of the New York Stock Exchange Composite Transaction for June
         14, 1999.

(3)      Estimated pursuant to Rule 457(c) solely for the purpose of calculating
         the registration fee.





                                       2



<PAGE>   3




                                     PART I
              INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

The document(s) containing the information specified in Part I of Form S-8 will
be sent or given to employees as specified in Rule 428(b)(1). These documents
(and the documents incorporated by reference pursuant to Item 3 of Part II of
this Registration Statement) taken together, constitute the prospectus for
purpose of Section 10(a) of the Securities Act of 1933, as amended.


                                     PART II
               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

                                     ITEM 3
                     INCORPORATION OF DOCUMENTS BY REFERENCE

The "Company", and the Plan hereby incorporate by reference in this Registration
Statement the following documents of the Company (SEC File No. 1-2572)
heretofore filed with the Securities and Exchange Commission:

         (1)      Annual Report on Form 10-K of ONEOK, Inc. for the year ended
                  August 31, 1998.

         (2)      All other reports filed by ONEOK or the Plan pursuant to
                  Section 13(a) or 15(d) of the Securities Exchange Act of 1934
                  since August 31, 1998. Form 8-K filed September 24, 1998. Form
                  8-K/A filed October 2, 1999. Form 8-K filed October 21, 1998.
                  Form 8-K filed December 16, 1998. Form 8-K filed December 16,
                  1998. Form 10-Q filed January 13, 1999. Form 8-K filed January
                  25, 1999. Form 8-K/A filed January 26, 1999. Form 8-K filed
                  January 25, 1999. Form 8-K filed February 8, 1999. Form 8-K
                  filed February 16, 1999. Form 8-K filed February 23, 1999.
                  Form 8-K filed February 24, 1999. Form 8-K filed February 24,
                  1999. Form 8-K filed February 26, 1999. Form 8-K filed March
                  5, 1999. Form 8-K filed March 19, 1999. Form 10-Q filed April
                  14, 1999. Form 8-K filed April 15, 1999. Form 8-K/A filed
                  April 29, 1999. Form 8-K filed April 19, 1999. Form 8-K filed
                  April 22, 1999. Form 8-K filed April 26, 1999. Form 8-K filed
                  May 3, 1999. Form 8-K filed May 13, 1999.

         (3)      ONEOK's Proxy Statement dated December 16, 1998 in connection
                  with its Annual Meeting of Shareholders held January 21, 1999.

         (4)      In addition, there is incorporated herein by reference all
                  documents filed subsequent to the date hereof, by the Company
                  and the Plan pursuant to Sections 13(a), 13(c), 14, or 15(d)
                  of the Securities Exchange Act of 1934, as amended, prior to
                  the filing of a post-effective amendment which indicates that
                  all securities have been sold or which deregisters all
                  securities then remaining unsold. Such documents are deemed to
                  be a part hereof from the date of filing of such documents.

                                     ITEM 4
                            DESCRIPTION OF SECURITIES

The following is a description of the Company's Common Stock offered.

The holders of the Company's Common Stock are entitled to receive such dividends
as may be declared by the Board of Directors out of funds legally available
therefor. Each outstanding share of Common Stock is entitled to full voting
rights for the election of directors and for all other purposes with one vote
for each share of Common Stock. In the event of any liquidation, dissolution, or
winding up of the Company, or any reduction of its capital resulting in any
distribution of its assets to its stockholders, The holders of Common Stock
shall be entitled to receive, pro rata, all the remaining assets of the Company
available for distribution to its stockholders. Each share

                                        3

<PAGE>   4




of Common Stock includes an associated right, each right ("Right") entitling the
holder to purchase one one-hundredth of a share of Series C Participating
Preferred Stock, par value $0.01 per share of the Company pursuant to a Rights
Agreement between the Company and a designated rights agent (the "Rights
Agreement"). The designation of Rights (Exhibit 4(c) hereto) is incorporated
herein by reference.

                                     ITEM 5
                     INTERESTS OF NAMED EXPERTS AND COUNSEL


The legality of the securities which may be purchased under the Plan has been
passed upon by the firm of Gable & Gotwals, 100 West Fifth Street, Suite 1000,
Tulsa, Oklahoma 74103, counsel for the Company. The firm of Gable & Gotwals, has
reviewed the statements made as to matters of law and legal conclusions under
"Securities to be Offered" and such statements are set forth in the documents
which form a part of the prospectus in reliance upon its authority as an expert.

                                     ITEM 6
                    INDEMNIFICATION OF DIRECTORS AND OFFICERS

Pursuant to Article VIII of the bylaws of ONEOK, Inc. upon authorization and
determination either (1) by the board of directors by a majority of a quorum is
not consisting of directors who were not parties to the action, suit, or
proceeding involved; (2) if such a quorum is not obtainable, or even if
obtainable and a quorum of disinterested directors so directs, by independent
counsel in a written opinion; or (3) by the stockholders, the Company is
obligated to indemnify any person who incurs liability by reason of the fact
that he is or was a director, officer, employee, or agent of the Company, or is
or was serving at its request as a director , officer, employee, or agent of
another corporation, partnership, joint venture, trust or other enterprise, or
as a member of any committee or similar body, if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interest of
the Company, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. However, in an action by
or in the right of the Company, no indemnification will be made if such person
shall be adjudged to be liable to the Company, unless such indemnification is
allowed by a court of competent jurisdiction.

Under insurance obtained by the Company, coverage of Company officers and
directors against liability for neglect, errors, omission, or breaches of duty
in their capacities as such is provided for both the Company, to the extent that
it is obligated to indemnify such officers and directors, and the officers and
directors themselves. Such coverage is provided in the amount of $75,000,000
with a retained limit by the Company of $250,000. The insurance companies are
obligated to pay covered losses in excess of the $250,000 retained limit, up to
the policies' limits of $75,000,000. Among the policies' exclusions are those
which exclude coverage for accounting for profits made within the meaning of
Section 16(b) of the Securities Act of 1934, claims based upon or attributable
to directors and officers gaining any personal profit or advantage to which such
individuals are not legally entitled, and for any claims brought about or
attributable to the dishonesty of an officer or director.

The registrant has been advised that, in the opinion of the Securities and
Exchange Commission, provisions providing for the indemnification by the
corporation of its officers, directors, and controlling persons against
liabilities imposed by the Securities Act of 1933 are against public policy as
expressed in said Act and are therefore unenforceable. It is recognized that the
above-summarized provisions of the registrant's bylaws and the applicable
Oklahoma General Corporation Law may be sufficiently broad to indemnify
officers, directors, and controlling persons of the registrant against
liabilities arising under said Act. Therefore, in the event that a claim of
indemnification against liability under said Act (other than the payment by the
registrant of expenses incurred or paid by a director, officer, or controlling
person of the registrant in the successful defense of any action, suit, or
proceeding) shall be asserted by an officer, director, or controlling person
under said provisions, the registrant will, unless in the opinion of its counsel
the question has already been settled by the controlling precedent, submit to a
court of appropriate jurisdiction the question of whether or not such
indemnification by it is against public policy as expressed in said Act and will
be governed by the final adjudication of such issue.

                                        4

<PAGE>   5




                                     ITEM 8
                                    EXHIBITS

The following exhibits are attached hereto or incorporated by reference herein:

<TABLE>
<CAPTION>

                                                                                        Page Number or
                                                                                        Incorporation by
                                                                                        Reference to
                                                                                        -----------------

<S>                                                                             <C>
(4)(a)   Article "Fourth" of the Certificate of Incorporation                   Incorporated by reference
          of ONEOK, Inc. (Preferred Stock and Common Stock)                     from Exhibit 3.1 to
                                                                                Amendment No. 3 to Registration
                                                                                Statement on Form S-4 filed
                                                                                August 31, 1997


(4)(b)   Certificate of Designation for Convertible Preferred                   Incorporated by reference
         stock of WAI, Inc. (Now ONEOK, Inc.) filed November 26, 1997           from Exhibit 3.3 to
                                                                                Amendment No. 3 to Registration
                                                                                Statement on Form S-4 filed
                                                                                August 31, 1997


(4)(c)   Certificate of Designation for Series C Participating                  Incorporated by reference
         Preferred Stock of ONEOK, Inc., filed November 26, 1998                from Exhibit No. 1 to
                                                                                Form 8-A, filed November 26,
                                                                                1997

(5)      Opinion of Gable & Gotwals, Inc.                                                 11


(23)(a)  Consent of Gable & Gotwals, Inc.
         (See Item 5)

(23)(b)  Consent of KPMG LLP                                                              13

(24)     Powers of Attorney (Included on pages 8 and 9)

(99)     ONEOK, Inc. Long-Term Incentive Plan                                             14
</TABLE>














                                        5

<PAGE>   6




                                     ITEM 9
                                  UNDERTAKINGS

a.       The undersigned registrant hereby undertakes:

         (1)      To file, during any period in which offers or sales are being
                  made, a post-effective amendment to this registration
                  statement:

                  (a)      To include any prospectus required by Section 10
                           (a)(3) of the Securities Act of 1933;

                  (b)      To reflect in the prospectus any facts or events
                           arising after the effective date of the registration
                           statement (or the most recent post-effective
                           amendment thereof) which, individually or in the
                           aggregate, represent a fundamental change in the
                           information set forth in the registration statement;

                  (c)      To include any material information with respect to
                           the Plan of distribution not previously disclosed in
                           the registration statement or any material change to
                           such information in the registration statement.

         (2)      That, for the purpose of determining any liability under the
                  Securities Act of 1933, each post-effective amendment shall be
                  deemed to be a new registration statement relating to the
                  securities offered therein, and the offering of such
                  securities at the time of shall be deemed to be the initial
                  bona fide offering thereof.

         (3)      To remove from registration by means of post-effective
                  amendment any of the securities being registered which remain
                  unsold at the termination of the offering.

b.       The undersigned registrant hereby undertakes that, for purpose of
         determining any liability under the Securities Act of 1933, each filing
         of the registrant's annual report pursuant to Section 13(a) or Section
         15(d) of the Securities Exchange Act of 1934 (and, where applicable,
         each filing of an employee benefit plan's annual report pursuant to
         Section 15(d) of the Securities Exchange Act of 1934) that is
         incorporated by reference in the registration statement shall be deemed
         to be a new registration statement relating to the securities offered
         herein, and the offering of such securities at that time shall be
         deemed to be the initial bona fide offering thereof.

c.       The undersigned registrant hereby undertakes to deliver or cause to be
         delivered with the prospectus to each employee to whom the prospectus
         is sent or given, the latest Annual Report to Shareholders unless such
         employee otherwise has received a copy of such report, in which case
         the registrant shall state in the prospectus that it will promptly
         furnish, without charge, a copy of such report on written request of
         the employee. If the last fiscal year of the registrant has ended
         within 120 days prior to the use of the prospectus, the Annual Report
         of the registrant of the preceding fiscal year may be delivered, but
         within such 120-day period the Annual Report for the last fiscal year
         will be furnished to each such employee.

         The undersigned registrant hereby undertakes to transmit or cause to be
         transmitted to all employees participating in the Plan who do not
         otherwise receive such material as stockholders or the registrant, at
         the time and in the manner such material is sent to its stockholders,
         copies of all reports, proxy statements, and other communications
         distributed to its stockholders generally.

d.       Insofar as indemnification for liabilities arising under the Securities
         Act of 1933 may be permitted to directors, officers and controlling
         persons of the registrant pursuant to the foregoing provisions, or
         otherwise, the registrant has been advised that in the opinion of the
         Securities and Exchange Commission such indemnification is against
         public policy as expressed in the Act and is, therefore, unenforceable.
         In

                                        6

<PAGE>   7




         the event that a claim for indemnification against such liabilities
         (other than the payment by the registrant of expenses incurred or paid
         by a director, officer or controlling person of the registrant in the
         successful defense of any action, suit or proceeding) is asserted by
         such director, officer or controlling person in connection with the
         securities being registered, the registrant will, unless in the opinion
         of its counsel the matter has been settled by controlling precedent,
         submit to a court of appropriate jurisdiction the question whether such
         indemnification by it is against public policy as expressed in the Act
         and will be governed by the final adjudication of such issue.










                                        7

<PAGE>   8




                                    SIGNATURE

Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8, and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Tulsa and the State of Oklahoma, on the 17th day of
June, 1999.


                                           ONEOK, Inc.


                                           By: Larry Brummett
                                               ---------------------------------
                                               Larry Brummett, Chairman of the
                                               Board and Chief Executive
                                               Officer












                                        8

<PAGE>   9




                                POWER OF ATTORNEY

Each person whose individual signature appears below hereby authorizes Larry
Brummett and Jim Kneale, or either of them, as attorney-in-fact with full power
of substitution, to execute in the name and on behalf of each person,
individually and in each capacity stated below, and to file any and all
amendments to this registration statement, including any and all post-effective
amendments and all instruments necessary or incidental in connection therewith.


                                   SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the undersigned
certify that to the best of their knowledge and belief, the registrant meets all
the requirements for filing on Form S-8. This registration statement has been
signed below by the following persons in the capacities indicated in the City of
Tulsa and the State of Oklahoma, on this 17th day of June, 1999.


Larry W. Brummett                          Jim Kneale
- -------------------------------            ---------------------------------
Larry W. Brummett                          Jim Kneale
Chairman of the Board,                     Vice President,
Chief Executive                            Chief Financial Officer, and
Officer, and Director                      Treasurer

David L. Kyle                              Barry D. Epperson
- -------------------------------            ---------------------------------
David L. Kyle                              Barry D. Epperson
President, Chief Operating                 Vice President, Controller, and
Officer, and Director                      Chief Accounting Officer

Edwyna G. Anderson                         Douglas T. Lake
- -------------------------------            ---------------------------------
Edwyna G. Anderson                         Douglas T. Lake
Director                                   Director

William M. Bell                            Bert H. Mackie
- -------------------------------            ---------------------------------
William M. Bell                            Bert H. Mackie
Director                                   Director

Douglas R. Cummings
- -------------------------------            ---------------------------------
Douglas R. Cummings                        Douglas Ann Newsom
Director                                   Director

William L. Ford                            Gary D. Parker
- -------------------------------            ---------------------------------
William L. Ford                            Gary D. Parker
Director                                   Director

Howard R. Fricke
- -------------------------------            ---------------------------------
Howard R. Fricke                           J. D. Scott
Director                                   Director

                                           Stanton L. Young
                                           ---------------------------------
                                           Stanton L. Young
                                           Director


                                        9

<PAGE>   10




                                  EXHIBIT INDEX

<TABLE>
<CAPTION>

                                                                                        PAGE NUMBER OR
EXHIBIT                                                                                 INCORPORATION BY
NUMBER            DESCRIPTION                                                           REFERENCE TO
- -------           -----------                                                           ----------------

<S>               <C>                                                                   <C>
(4)(a)            Article "Fourth" of the Certificate of Incorporation                  Incorporated by reference
                  of ONEOK, Inc. (Preferred Stock and Common Stock)                     from Exhibit 3.1 to
                                                                                        Amendment No. 3 to
                                                                                        Registration Statement on
                                                                                        Form S-4 filed August 31,
                                                                                        1997


(4)(b)            Certificate of Designation for Convertible Preferred                  Incorporated by reference
                  stock of WAI, Inc. (Now ONEOK, Inc.) filed November 26, 1997          from Exhibit 3.3 to
                                                                                        Amendment No. 3 to
                                                                                        Registration Statement on
                                                                                        Form S-4 filed August 31,
                                                                                        1997


(4)(c)            Certificate of Designation for Series C Participating                 Incorporated by reference
                  Preferred Stock of ONEOK, Inc., filed November 26, 1998               from Exhibit No. 1 to
                                                                                        Form 8-A, filed November
                                                                                        26, 1997


(5)               Opinion of Gable & Gotwals                                            11

(23)(a)           Consent of Gable & Gotwals (See Item 5)

(23)(b)           Consent of KPMG LLP                                                   13

(24)              Powers of Attorney (Included on pages 8 and 9)

(99)              ONEOK, Inc. Long-Term Incentive Plan                                  14
</TABLE>


                                       10

<PAGE>   1

                          [GABLE & GOTWALS LETTERHEAD]

                                  June 17, 1999


ONEOK, Inc.
100 West Fifth Street
Tulsa, OK 74103

                                Re: S-8 Registration Statement Under the Securi-
                                    ties Act of 1933, Relating to the Shares of
                                    Common Stock of ONEOK, Inc. in Relation
                                    to the ONEOK, Inc. Long-Term Incentive Plan

Gentlemen:

         We understand that ONEOK, Inc., an Oklahoma corporation (hereinafter
referred to as the "Company"), will file with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, a Form S-8 Registration
Statement relating to the registration of shares of the Company's Common Stock
with respect to the ONEOK, Inc. Long-Term Incentive Plan (the "Plan").

         We have examined (a) the above-mentioned Registration Statement which
will be filed with the Securities and Exchange Commission; (b) the Certificate
of Incorporation and Bylaws of the Company, as amended; (c) the ONEOK, Inc.
Long-Term Incentive Plan and the corporate actions taken by the Board of
Directors in connection with the Registration Statement and related matters; and
(d) such other corporate records, certificates of public officials and officers
of the Company and other documents as we have considered relevant to the matters
covered by this opinion.

         In connection with the foregoing, as counsel for the Company, we wish
to advise you as follows:


                                       11
<PAGE>   2





         1. The Company is a corporation validly organized and existing under
the laws of the State of Oklahoma and is duly qualified to do business as a
corporation in the State of Kansas.

         2. The filing of the above-mentioned Registration Statement has been
duly authorized by the proper corporate action on the part of the Company.

         3. Assuming the Shares are being issued in compliance with the terms
and conditions of the Plan, when the certificates for the Shares have been
executed by the proper officer of the Company, countersigned by the Transfer
Agent and registered by the Registrar thereof, the certificates for such Shares
will represent, and the Shares will constitute, duly authorized, legally issued,
fully paid, non-assessable, valid and legal shares of the Common Stock of the
Company.

         We hereby consent to:

         1. Being named in the Form S-8 Registration Statement and documents
constituting the prospectus which is being furnished, and in any amendments
thereto, as counsel for the Company, passing on legal matters in connection with
the issuance of the Common Stock to the Trustee under the Plan;

         2. The making in the Form S-8 Registration Statement and documents
constituting the prospectus, and in any amendments thereto, of the statements
now appearing therein under the caption "interests of Named Experts and
Counsel," insofar as they are applicable to us; and

         3. The filing of this opinion as an exhibit to the above-mentioned Form
S-8 Registration Statement.

                                         Very truly yours,

                                         GABLE & GOTWALS



                                         By   Donald A. Kihle
                                              ---------------------
                                              Donald A. Kihle



                                       12

<PAGE>   1




                                                                 EXHIBIT (23)(b)

                          INDEPENDENT AUDITORS' CONSENT



The Board of Directors
ONEOK, Inc.


         We consent to the incorporation by reference herein of our report on
the Consolidated Financial Statements of ONEOK, Inc. as of August 31, 1998 and
1997, and for each of the years in the three-year period ended August 31, 1998,
which report appears in the August 31, 1998, Annual Report on Form 10-K of
ONEOK, Inc.


KPMG LLP


Tulsa, Oklahoma
June 17, 1999


                                       13

<PAGE>   1


                                                                      EXHIBIT 99

                                   ONEOK, INC.
                            LONG-TERM INCENTIVE PLAN

1.    PURPOSES.

      The purposes of this Plan are (a) to provide competitive incentives that
      will enable the Company to attract, retain, motivate, and reward Key
      Employees and Non-Employee Directors of the Company, and (b) to give the
      Company's Key Employees and Non-Employee Directors an interest parallel to
      the interests of the Company's shareholders generally.

2.    DEFINITIONS.

      Unless otherwise required by the context, the following terms, when used
      in this Plan, shall have the meanings set forth in this Section 2.

      (a)     "Beneficiary" means a person or entity (including a trust or
              estate), designated in writing by a Participant on such forms and
              in accordance with such terms and conditions as the Committee may
              prescribe, to whom the Participant's rights under the Plan shall
              pass in the event of the death of the Participant.

      (b)     "Board" or "Board of Directors" means the Board of Directors of
              the Company, as constituted from time to time.

      (c)     "Change in Control" means any of the following:

              (i)   any person (as such term is used in Sections 13(d) and
                    14(d)(2) of the Exchange Act), other than the Company, a
                    Subsidiary, an employee benefit plan of the Company or a
                    Subsidiary, or any person acting on behalf of the Company or
                    a Subsidiary in a distribution of stock to the public,
                    becomes the beneficial owner (as defined in Rule 13d-3 under
                    the Exchange Act), directly or indirectly, of securities of
                    the Company representing more than fifteen percent of the
                    combined voting power of the Company's then outstanding
                    securities;

              (ii)  shareholders of the Company approve (A) an agreement for the
                    sale or disposition of all or substantially all of the
                    Company's assets to an entity which is not a Subsidiary or
                    owned by shareholders of the Company in substantially the
                    same proportions as their ownership of Common Stock, (B) a
                    plan of complete liquidation, or (C) a consolidation or
                    merger of the Company in which the Company is not the
                    continuing or surviving corporation or pursuant to which
                    shares of Common Stock would be converted into cash,
                    securities or other


                                      14
<PAGE>   2




                    property, other than a merger in which the holders of Common
                    Stock immediately prior to the merger will have
                    substantially the same proportionate ownership of common
                    stock of the surviving corporation immediately after the
                    merger; or

              (iii) the persons who were members of the Board of Directors
                    immediately before a tender or exchange offer by any person
                    other than the Company or a Subsidiary, or before a merger,
                    consolidation, or contested election, or before any
                    combination of such transactions, cease to constitute a
                    majority of the Board of Directors as a result of such
                    transaction or transactions.

      (d)     "Code" means the Internal Revenue Code of 1986, as amended and in
              effect from time to time. References to a particular section of
              the Code shall include references to any related Treasury
              Regulations and to successor provisions.

      (e)     "Committee" means the Committee appointed by the Board of
              Directors to administer the Plan pursuant to the provisions of
              section 11(a) below.

      (f)     "Common Stock" means common stock, $.01 par value, of the Company.

      (g)     "Company" means ONEOK, Inc., an Oklahoma corporation its
              successors and assigns.

      (h)     "Director Fees" means all compensation and fees paid to a
              Non-Employee Director by the Company for his services as a member
              of the Board of Directors.

      (i)     "Director Stock Award" means an award of ONEOK, Inc. Common Stock
              granted to a Non-Employee Director.

      (j)     "Exchange Act" means the Securities Exchange Act of 1934, as
              amended from time to time.

      (k)     "Fair Market Value" on a particular date means the average of the
              high and low sale prices of a share of Common Stock in
              consolidated trading on the date in question as reported by The
              Wall Street Journal or another reputable source designated by the
              Committee; provided that if there were no sales on such date
              reported as provided above, the respective prices on the most
              recent prior day for which a sale was so reported. In the case of
              an Incentive Stock Option, if the foregoing method of determining
              Fair Market Value should be inconsistent with section 422 of the
              Code, "Fair Market Value" shall be determined by the Committee in
              a manner consistent with such section of the Code and shall mean
              the value as so determined.

      (l)     "General Counsel" means the General Counsel of the Company serving
              from time to time.


                                      15
<PAGE>   3




      (m)     "Incentive Stock Option" means an option, including an Option as
              the context may require, intended to qualify for the tax treatment
              applicable to incentive stock options under section 422 of the
              Code.

      (n)     "Key Employee" means an employee of the Company or a Subsidiary,
              including an officer or director who is such an employee, who the
              Committee determines is in a position to contribute significantly
              to the growth and profitability of, or to perform services of
              major importance to, the Company and its Subsidiaries.

      (o)     "Non-Employee Director" means a member of the Board of Directors
              of the Company who is not an employee of the Company, and who
              qualifies as a "Non-Employee Director" under the definition of
              that term in SEC Rule 16b-3.

      (p)     "Non-Statutory Stock Option" means an option, including an Option
              as the context may require, which is not intended to qualify for
              the tax treatment applicable to incentive stock options under
              section 422 of the Code.

      (q)     "Option" means an option granted under this Plan to purchase
              shares of Common Stock. Options may be Incentive Stock Options or
              Non-Statutory Stock Options.

      (r)     "Participant" means a Key Employee or Non-Employee Director who
              has been granted a Stock Incentive.

      (s)     "Performance Unit Award" means an amount of cash or shares of
              Common Stock or a combination of each, that will be distributed in
              the future if continued employment and/or other performance
              objectives or contingencies specified by the Committee are
              attained. Such other performance objectives may include, without
              limitation, corporate, divisional or business unit financial or
              operating performance measures and such other contingencies may
              include the Participant's depositing with the Company, acquiring
              or retaining for stipulation time periods specified amounts of
              Common Stock. The amount of the award may but need not be
              determined by reference to the market value of Common Stock.

      (t)     "Plan" means the ONEOK, Inc. Long-Term Incentive Plan set forth in
              these pages, as amended from time to time.

      (u)     "Plan Year" means the calendar year beginning on January 1 and
              ending the next December 31.

      (v)     "Restricted Stock Award" means shares of Common Stock which are
              issued or transferred to a Participant under Section 5 below and
              which will become free of restrictions specified by the Committee
              if continued employment and/or other performance objectives or
              contingencies specified by the Committee are attained. Such


                                      16
<PAGE>   4



              other performance objectives may include, without limitation,
              corporate, divisional or business unit financial or operating
              performance measures and such other contingencies may include the
              Participant's depositing with the Company, acquiring or retaining
              for stipulated time periods specified amounts of Common Stock.

      (w)     "SEC Rule 16b-3" means Rule 16b-3 of the Securities and Exchange
              Commission promulgated under the Exchange Act, as such rule or any
              successor rule may be in effect from time to time.

      (x)     "Section 16 Person" means a person subject to Section 16(b) of the
              Exchange Act with respect to transactions involving equity
              securities of the Company.

      (y)     "Stock Bonus Award" means an amount of cash or shares of Common
              Stock which is distributed to a Participant or which the Committee
              agrees to distribute in the future to a Participant in lieu of, or
              as a supplement to, any other compensation that may have been
              earned by services rendered prior to the date the distribution is
              made. The amount of the award may but need not be determined by
              reference to the market value of Common Stock. Performance Unit
              Awards and Restricted Stock Awards are specific types of Stock
              Bonus Awards.

      (z)     "Stock Incentive" means an award granted under this Plan in one of
              the forms provided for in Section 3.

      (aa)    "Subsidiary" means a corporation or other form of business
              association of which shares (or other ownership interest) having
              more than 50 percent of the voting power are or in the future
              become owned or controlled, directly or indirectly, by the
              Company; provided, however, that in the case of an Incentive Stock
              Option, the term "Subsidiary" shall mean a Subsidiary (as defined
              by the preceding clause) which is also a "subsidiary corporation"
              as defined in Section 424(f) of the Code.

3.    GRANTS OF STOCK INCENTIVES.

      (a)     Subject to the provisions of the Plan, the Committee may at any
              time, or from time to time, grant Key Employees Stock Bonus
              Awards, which may but need not be Performance Unit Awards or
              Restricted Stock Awards, and/or Options, which may be Incentive
              Stock Options or Non-Statutory Stock Options.

      (b)     Subject to the provisions of the Plan, the Committee shall grant
              Director Stock Awards to Non-Employee Directors in accordance with
              Section 7 of the Plan. Notwithstanding anything else otherwise
              expressed or implied in the Plan, no other form of Stock Incentive
              shall be granted to Non-Employee Directors under the Plan, and in
              no event shall any grant of an Incentive Stock Option be made to a
              Non-Employee Director.



                                      17
<PAGE>   5



      (c)     After a Stock Incentive has been granted,

              (i)   the Committee may waive any term or condition thereof that
                    could have been excluded from such Stock Incentive when it
                    was granted, and

              (ii)  with the written consent of the affected Participant, may
                    amend any Stock Incentive after it has been granted to
                    include (or exclude) any provision which could have been
                    included in (or excluded from) such Stock Incentive when it
                    was granted, and no additional consideration need be
                    received by the Company in exchange for such waiver or
                    amendment.

4.    STOCK SUBJECT TO THE PLAN.

      (a)     The maximum number of shares of Common Stock which was authorized
              to be issued or transferred pursuant to Stock Incentives to be
              granted under the Plan upon the Plan's initial adoption on August
              17, 1995, was 1,000,000 shares of Common Stock ("Initially
              Authorized Shares"), of which 554,800 shares remain available for
              grant as of August 20, 1998; and the Board has authorized that the
              amount of those shares remaining eligible to be granted on the
              effective date of the Plan, as amended and restated, be carried
              over and continued to be reserved, together with reservation of an
              additional number of shares necessary to have a total of 2,000,000
              shares of Common Stock which may be issued or transferred pursuant
              to Stock Incentives granted under the Plan on and after the date
              of such amendment and restatement of the Plan, subject to the
              provisions below of paragraph 4(c) and of Section 9; provided,
              that the maximum number of shares of Common Stock with respect to
              which Options or other Stock Incentives may be granted or issued
              to any employee under the Plan during any year is 150,000.

      (b)     Such shares may be authorized but unissued shares of Common Stock,
              shares of Common Stock held in treasury, whether acquired by the
              Company specifically for use under this Plan or otherwise, or
              shares issued or transferred to, or otherwise acquired by, a trust
              pursuant to paragraph 12(d) below, as the Committee may from time
              to time determine, provided, however, that any shares acquired or
              held by the Company for the purposes of this Plan shall, unless
              and until issued or transferred to a trust pursuant to paragraph
              12(d) below or to a Participant in accordance with the terms and
              conditions of a Stock Incentive, be and at all times remain
              authorized but unissued shares or treasury shares (as the case may
              be), irrespective of whether such shares are entered in a special
              account for purposes of this Plan, and shall be available for any
              corporate purpose.

      (c)     If any shares of Common Stock subject to a Stock Incentive shall
              not be issued or transferred to a Participant and shall cease to
              be issuable or transferable to a Participant because of the
              termination, expiration or cancellation, in whole or in part,



                                      18
<PAGE>   6



              of such Stock Incentive or for any other reason, or if any such
              shares shall, after issuance or transfer, be reacquired by the
              Company because of the Participant's failure to comply with the
              terms and conditions of a Stock Incentive or for any other reason,
              the shares not so issued or transferred, or the shares so
              reacquired by the Company, as the case may be, shall no longer be
              charged against the limitations provided for in paragraph (a)
              above of this Section 4 and may again be made subject to Stock
              Incentives; provided that the number of shares not so issued or
              transferred and any such reacquired shares may again be made
              subject to Stock Incentives for Section 16 Persons only if the
              General Counsel determines that doing so would not jeopardize any
              exemption from Section 16 of the Exchange Act (including without
              limitation SEC Rule 16b-3) for which the Company intends Section
              16 Persons to qualify. If a Participant pays the purchase price of
              shares subject to an Option by surrendering shares of Common Stock
              in accordance with the provisions of paragraph 6(b)(iv) below, the
              number of shares surrendered shall be added back to the number of
              shares available for issuance or transfer under the Plan so that
              the maximum number of shares that may be issued or transferred
              under the Plan pursuant to paragraph 4(a) above shall have been
              charged only for the net number of shares issued or transferred
              pursuant to the Option exercise.

5. STOCK BONUS AWARDS, PERFORMANCE UNIT AWARDS AND RESTRICTED STOCK AWARDS.

      Stock Bonus Awards, Performance Unit Awards and Restricted Stock Awards
      shall be subject to the following provisions:

      (a)     A Key Employee may be granted a Stock Bonus Award, Performance
              Unit Award or Restricted Stock Award, and a Non-Employee Director
              may be granted a Director Stock Award, whether or not he or she is
              eligible to receive similar or dissimilar incentive compensation
              under any other plan or arrangement of the Company.

      (b)     Shares of Common Stock subject to a Stock Bonus Award may be
              issued or transferred to a Participant at the time such Award is
              granted, or at any time subsequent thereto, or in installments
              from time to time, and subject to such terms and conditions, as
              the Committee shall determine. In the event that any such issuance
              or transfer shall not be made to the Participant at the time such
              Award is granted, the Committee may but need not provide for
              payment to such Participant, either in cash or shares of Common
              Stock, from time to time or at the time or times such shares shall
              be issued or transferred to such Participant, of amounts not
              exceeding the dividends which would have been payable to such
              Participant in respect of such shares (as adjusted under Section
              9) if such shares had been issued or transferred to such
              Participant at the time such Award was granted.

      (c)     Any Stock Bonus Award, Performance Unit Award or Restricted Stock
              Award may, in the discretion of the Committee, be settled in cash,
              on each date on which shares


                                      19
<PAGE>   7



              would otherwise have been delivered or become unrestricted, in an
              amount equal to the Fair Market Value on such date of the shares
              which would otherwise have been delivered or become unrestricted;
              and the number of shares for which such cash payment is made shall
              be added back to the maximum number of shares available for use
              under the Plan, provided that the number of shares for which such
              cash payment is made may be made subject to Stock Incentives for
              Section 16 Persons only if the General Counsel determines that
              doing so would not jeopardize any exemption from Section 16 of the
              Exchange Act (including without limitation SEC Rule 16b-3) for
              which the Company intends Section 16 Persons to qualify.

      (d)     Stock Bonus Awards, Performance Unit Awards and Restricted Stock
              Awards shall be subject to such terms and conditions, including,
              without limitation, restrictions on the sale or other disposition
              of the shares issued or transferred pursuant to such Award, and
              conditions calling for forfeiture of the Award or the shares
              issued or transferred pursuant thereto in designated
              circumstances, as the Committee shall determine; provided however,
              that upon the issuance or transfer of shares to a Participant
              pursuant to any such Award, the recipient shall, with respect to
              such shares, be and become a shareholder of the Company fully
              entitled to receive dividends, to vote and to exercise all other
              rights of a shareholder except to the extent otherwise provided in
              the Award. All or any portion of a Stock Bonus Award may but need
              not be made in the form of a Performance Unit Award or a
              Restricted Stock Award.

      (e)     Each Stock Bonus Award, Performance Unit Award and Restricted
              Stock Award shall be evidenced by a written instrument in such
              form as the Committee shall determine, signed by an officer of the
              Company duly authorized to do so, provided that such instrument is
              consistent with this Plan and incorporates it by reference.

      (f)     Director Stock Awards shall be granted as determined by the
              Committee in accordance with the provisions of Section 7, and as
              otherwise provided by this Plan.

6.    OPTIONS.

      Options shall be subject to the following provisions:

      (a)     Subject to the provisions of Section 9, the purchase price per
              share shall be, in the case of an Incentive Stock Option, not less
              than 100 percent of the Fair Market Value of a share of Common
              Stock on the date the Incentive Stock Option is granted (or in the
              case of any optionee who, at the time such Incentive Stock Option
              is granted, owns stock possessing more than 10 percent of the
              total combined voting power of all classes of stock of his or her
              employer corporation or of its parent or subsidiary corporation,
              not less than 110 percent of the Fair Market Value of a share of
              Common Stock on the date the Incentive Stock Option is granted)
              and, in the case of a Non-Statutory Stock Option, not less than
              the par value (if any) of a share of Common Stock on the date the



                                      20
<PAGE>   8


              Non-Statutory Stock Option is granted. A Non-Statutory Stock
              Option may (but need not) entitle the Participant to purchase
              shares of Common Stock at any fixed discount specified by the
              Committee from Fair Market Value on the date of purchase. Subject
              to the foregoing limitations, the purchase price per share may, if
              the Committee so provides at the time of grant of an Option, be
              indexed to the increase or decrease in an index specified by the
              Committee.

      (b)     The purchase price of shares subject to an Option may be paid in
              whole or in part (i) in cash, (ii) by bank-certified, cashier's or
              personal check subject to collection, (iii) if so provided in the
              Option and subject to such terms and conditions as the Committee
              may impose, by delivering to the Company a properly executed
              exercise notice together with a copy of irrevocable instructions
              to a stockbroker to sell immediately some or all of the shares
              acquired by exercise of the Option and to deliver promptly to the
              Company an amount of sale proceeds (or, in lieu of or pending a
              sale, loan proceeds) sufficient to pay the purchase price, or (iv)
              if so provided in the Option and subject to such terms and
              conditions as are specified in the Option, in shares of Common
              Stock or other property surrendered to the Company. Property for
              purposes of this paragraph shall include an obligation of the
              Company unless prohibited by applicable law. Shares of Common
              Stock thus surrendered shall be valued at their Fair Market Value
              on the date of exercise. Any such other property thus surrendered
              shall be valued at its fair market value on any reasonable basis
              established or approved by the Committee. If so provided in the
              Option and subject to such terms and conditions as are specified
              in the Option, in lieu of the foregoing methods of payment, any
              portion of the purchase price of the shares to be issued or
              transferred may be paid by a promissory note secured by pledge of
              the purchased shares in such form and containing such provisions
              (which may but need not provide for interest and for payment of
              the note at the election of the Participant in cash or in shares
              of Common Stock or other property surrendered to the Company) as
              the Committee may approve; provided that (A) if the Committee
              permits any such note to be paid by surrender of shares of Common
              Stock, such shares shall be valued at their Fair Market Value on
              the date of such surrender, and (B) if the Committee permits any
              such note to be paid by surrender of other property, such other
              property shall be valued at its fair market value on any
              reasonable basis established or approved by the Committee, and (C)
              in the case of an Incentive Stock Option, any such note shall bear
              interest at the minimum rate required to avoid imputation of
              interest under federal income tax laws applicable at the time of
              exercise and (D) any such note shall mature in ten years or such
              lesser period as may be specified by the Committee.

      (c)     Options may be granted for such lawful consideration, including
              money or other property, tangible or intangible, or labor or
              services received or to be received by the Company, as the
              Committee may determine when the Option is granted. Property for
              purposes of the preceding sentence shall include an obligation of
              the Company unless prohibited by applicable law. Subject to the
              foregoing and the other provisions of this



                                      21
<PAGE>   9


              Section 6, each Option may be exercisable in full at the time of
              grant or may become exercisable in one or more installments, at
              such time or times and subject to satisfaction of such terms and
              conditions as the Committee may determine. The Committee may at
              any time accelerate the date on which an Option becomes
              exercisable, and no additional consideration need be received by
              the Company in exchange for such acceleration. Unless otherwise
              provided in the Option, an Option, to the extent it becomes
              exercisable, may be exercised at any time in whole or in part
              until the expiration or termination of the Option.

      (d)     Each Option shall be exercisable during the life of the optionee
              only by him or her or his or her guardian or legal representative,
              and after the death only by his or her Beneficiary or, absent a
              Beneficiary, by his or her estate or by a person who acquired the
              right to exercise the Option by will or the laws of decent and
              distribution; provided that an Option of a Section 16 Person and
              any Incentive Stock Option may be exercisable after death by a
              Beneficiary only if such exercise would be, in the opinion of the
              General Counsel, permissible under and consistent with SEC Rule
              16b-3 or Section 422 of the Code, as the case may be. Each Option
              shall expire at such time or times as the Committee may determine,
              provided that notwithstanding any other provision of this Plan,
              (i) no Option shall be exercisable after the tenth anniversary of
              the date the Option was granted, and (ii) no Incentive Stock
              Option which is granted to any optionee who, at the time such
              Option is granted, owns stock possessing more than 10 percent of
              the total combined voting power of all classes of stock of his or
              her employer corporation or of its parent or subsidiary
              corporation, shall be exercisable after the expiration of five (5)
              years from the date such Option is granted. If an Option is
              granted for a term of less than ten years, the Committee may, at
              any time prior to the expiration of the Option, extend its term
              for a period ending not later than on the tenth anniversary of the
              date the Option was granted, and no additional consideration need
              be received by the Company in exchange for such extension. The
              Committee may but need not provide for an Option to be exercisable
              after termination of employment until its fixed expiration date
              (or until an earlier date or specified event occurs).

      (e)     An Option may, but need not, be an Incentive Stock Option. All
              shares of Common Stock which may be made subject to Stock
              Incentives under this Plan may be made subject to Incentive Stock
              Options; provided that the aggregate Fair Market Value (determined
              as of the time the Option is granted) of the stock with respect to
              which Incentive Stock Options may be exercisable for the first
              time by any Key Employee during any calendar year (under all
              plans, including this Plan, of his or her employer corporation and
              its parent and subsidiary corporations) shall not exceed $100,000
              or such other amount as may apply under the Code.

      (f)     Each Option shall be evidenced by a written instrument, signed by
              an officer of the Company duly authorized to do so, which shall
              contain such terms and conditions, and


                                      22
<PAGE>   10


              shall be in such form, as the Committee shall determine, provided
              the instrument is consistent with this Plan and incorporates it by
              reference. An Option, if so approved by the Committee, may include
              terms, conditions, restrictions and limitations in addition to
              those provided for in this Plan including, without limitation,
              terms and conditions providing for the transfer or issuance of
              shares, on exercise of an Option, which may be non-transferable
              and forfeitable to the Company in designated circumstances.

      (g)     The Committee may specify, at the time of grant of an Incentive
              Stock Option or, with respect to a Non-Statutory Stock Option, at
              or after the time of grant, that a Participant shall be granted a
              Non-Statutory Stock Option (a "Restored Option") if and when (i)
              such Participant exercise all or part of an Option, including a
              previously granted Restored Option, (an "Original Option") by
              surrendering shares of Common Stock already owned by him or her in
              full or partial payment of the Option price under such Original
              Option and/or (ii) shares of Common Stock are surrendered or
              withheld to satisfy tax obligations incident to the exercise of
              such Original Option. All Restored Options shall be subject to the
              availability of shares of Common Stock under the Plan at the time
              of such exercise. A Restored Option shall cover a number of shares
              of Common Stock not greater than the number of shares of Common
              Stock surrendered in payment of the option price under such
              Original Option and/or used to satisfy any tax obligation incident
              to the exercise of such Original Option. Each Restored Option
              shall have an option price equal to the Fair Market Value of the
              Common Stock on the date of grant of the Restored Option and shall
              expire on the stated expiration date of the Original Option. The
              date of grant of a Restored Option shall be the date on which the
              exercise of the Original Option or a previously granted Restored
              Option resulted in the grant of such Restored Option. A Restored
              Option shall be exercisable at any time and from time to time from
              or after the date of grant of the Restored Option (or as the
              Committee in its sole discretion shall otherwise specify in the
              written instrument evidencing the Restored Option). The written
              instrument evidencing a Restored Option shall contain such other
              terms and conditions, which may include a restriction on the
              transferability of the Common Stock received upon the exercise of
              the Original Option or Restored Option, as the Committee in its
              sole discretion may deem desirable.

      (h)     No Participant shall make any elective contribution or employee
              contribution to the Plan (within the meaning of Treasury
              Regulation Section 1.401(k)-1(d)(2)(iv)(B)(4), during the balance
              of the calendar year after the Participant's receipt of a hardship
              distribution from a plan of the Company or a related party within
              the provisions of Code Sections 414(b), (c), (m) or (o) containing
              a cash or deferred arrangement under Section 401(k) of the Code,
              or during the following calendar year. The preceding sentence
              shall not apply if and to the extent that the General Counsel
              determines it is not necessary to qualify any such plan as a cash
              or deferred arrangement under Section 401(k) of the Code.


                                      23
<PAGE>   11



      (i)     No Option shall be exercisable unless and until the Company (i)
              obtains the approval of all regulatory bodies whose approval the
              General Counsel may deem necessary or desirable, and (ii) complies
              with all legal requirements deemed applicable by the General
              Counsel.

      (j)     An Option shall be considered exercised if and when written
              notice, signed by the person exercising the Option and stating the
              number of shares with respect to which the Option is being
              exercised, is received by the Secretary on a properly completed
              form approved for this purpose by the Committee, accompanied by
              full payment of the Option exercise price in one or more of the
              forms authorized by the Committee and described in Section 6(b)
              above for the number of shares to be purchased. No Option may at
              any time be exercised with respect to a fractional share.

7.    DIRECTOR STOCK AWARDS.

      (a)     Each Non-Employee Director Participant shall receive such portion
              of his Director Fees in Common Stock as shall be established from
              time to time by the Board, with the remainder of such Director
              Fees to be payable in cash or in Common Stock as elected by the
              Non-Employee Director Participant in accordance with paragraph
              7(b), below.

      (b)     Each Non-Employee Director Participant shall have an opportunity
              to elect to have the remaining portion of his Director Fees paid
              in cash or shares of Common Stock or a combination thereof. Except
              for the initial election pursuant to the adoption of the Plan with
              this Section 7 therein, or the Director's election to the Board,
              any such election shall be made in writing and must be made at
              least thirty (30) days before the beginning of the Plan Year in
              which the services are to be rendered giving rise to such Director
              Fees and may not be changed thereafter except by timely written
              election as to Director Fees for services to be rendered in a
              subsequent Plan Year. In the absence of such an election, such
              remaining portion of the Director Fees of a Non-Employee Director
              shall be paid entirely in cash. Nothing contained in this
              paragraph 7(b) shall be interpreted in such a manner as would
              disqualify the Plan for treatment as a "formula plan" under Rule
              16b-3 pursuant to which the terms and conditions of each
              transaction authorized by this Section 7 are fixed in advance by
              the relevant terms and provisions thereof.

      (c)     The number of shares of Common Stock to be paid and distributed to
              a Non-Employee Director under the provisions paragraphs 7(a) and
              (b), above, shall be determined by dividing the dollar amount of
              his Director Fees (which the Board has established, and/or such
              Non-Employee Director has elected) to be paid in Common Stock on
              any payment date by the Fair Market Value of a share of Common
              Stock on that date. Except as may otherwise be directed by the
              Committee, in its sole discretion, the payment and distribution of
              such shares to a Non-Employee Director shall be on or within five
              days after the date such Director Fees would otherwise have been
              paid to him in cash.


                                      24
<PAGE>   12


8.    CERTAIN CHANGE IN CONTROL, TERMINATION OF EMPLOYMENT AND DISABILITY
      PROVISIONS.

      Notwithstanding any provision of the Plan to the contrary, any Stock
      Incentive which is outstanding but not yet exercisable, vested or payable
      at the time of a Change in Control shall become exercisable, vested and
      payable at that time; provided that if such Change in Control occurs less
      than six months after the date on which such Stock Incentive was granted
      and if the consideration for which such Stock Incentive was granted
      consisted in whole or in part of future services, then such Stock
      Incentive shall become exercisable, vested and payable at the time of such
      Change in Control only if the Participant agrees in writing (if requested
      to do so by the Committee in writing) to remain in the employ of the
      Company or a Subsidiary at least through the date which is six months
      after the date such Stock Incentive was granted with substantially the
      same title, duties, authority, reporting relationships and compensation as
      on the day immediately preceding the Change in Control. Any Option
      affected by the preceding sentence shall remain exercisable until it
      expires or terminates pursuant to its terms and conditions. Subject to the
      foregoing provisions of this Section 8, the Committee may at any time, and
      subject to such terms and conditions as it may impose:

      (a)     authorize the holder of an Option to exercise the Option following
              the termination of the Participant's employment with the Company
              and its Subsidiaries, or following the Participant disability,
              whether or not the Option would otherwise be exercisable following
              such event, provided that in no event may an Option be exercised
              after the expiration of its term;

      (b)     grant Options which become exercisable only in the event of a
              Change in Control;

      (c)     authorize a Stock Bonus Award, Performance Unit Award or
              Restricted Stock Award to become non-forfeitable, fully earned and
              payable upon or following (i) the termination of the Participant's
              employment with the Company and its Subsidiaries, or (ii) the
              Participant's disability, whether or not the Award would otherwise
              become non-forfeitable, fully earned and payable upon or following
              such event;

      (d)     grant Stock Bonus Awards, Performance Unit Awards and Restricted
              Stock Awards which become non-forfeitable, fully earned and
              payable only in the event of a Change in Control; and

      (e)     provide in advance or at the time of Change in Control for cash to
              be paid in settlement of any Option, Stock Bonus Award,
              Performance Unit Award or Restricted Stock Award in the event of a
              Change in Control, either at the election of the Participant or at
              the election of the Committee.



                                      25
<PAGE>   13

9.    ADJUSTMENT PROVISIONS.

      In the event that any recapitalization, or reclassification, split-up or
      consolidation of shares of Common Stock shall be effected, or the
      outstanding shares of Common Stock shall be, in connection with a merger
      or consolidation of the Company or a sale by the Company of all or a part
      of its assets, exchanged for a different number or class of shares of
      stock or other securities or property of the Company or any other entity
      or person, or a record date for determination of holders of Common Stock
      entitled to receive a dividend or other distribution payable in Common
      Stock or other property (other than normal cash dividends) shall occur,
      (a) the number and class of shares or other securities or property that
      may be issued or transferred pursuant to Stock Incentives thereafter
      granted or that may be optioned or awarded under the Plan to any
      Participant, (b) the number and class of shares or other securities or
      property that may be issued or transferred under outstanding Stock
      Incentives, (c) the purchase price to be paid per share under outstanding
      and future Stock Incentives, and (d) the price to be paid per share by the
      Company or a Subsidiary for shares or other securities or property issued
      or transferred pursuant to Stock Incentives which are subject to a right
      of the Company or a Subsidiary to reacquire such shares or other
      securities or property, shall in each case be equitably adjusted; provided
      that with respect to Incentive Stock Options any such adjustments shall
      comply with Sections 422 and 424 of the Code.

10.   EFFECTIVE DATE AND DURATION OF PLAN.

      The Plan shall be effective when it is first approved by the Board of
      Directors, provided that the shareholders of the Company thereafter
      approve it within one year of that date. If the Plan is not so approved by
      shareholders, the Plan (and any Stock Incentive granted thereunder) shall
      be null, void and of no force or effect. If so approved, the Plan shall
      remain in effect, and Stock Incentives may be granted, until Stock
      Incentives have been granted with respect to all shares authorized to be
      issued or transferred hereunder or until the Plan is sooner terminated by
      the Board of Directors, and shall continue in effect thereafter with
      respect to any Stock Incentives outstanding at that time. In no event
      shall an Incentive Stock Option be granted under the Plan more than ten
      (10) years from the date the Plan is first adopted by the Board, or the
      date the Plan is approved by the shareholders of the Company, whichever is
      earlier.

11.   ADMINISTRATION.

      (a)     The Plan shall be administered by a committee of the Board
              consisting of two or more directors appointed from time to time by
              the Board. No person shall be appointed to or shall serve as a
              member of such committee unless at the time of such appointment
              and service he or she shall be a "Non-Employee Director," as
              defined in SEC Rule 16b-3. Unless the Board determines otherwise,
              the Committee shall be comprised solely of "outside directors"
              within the meaning of Section 162(m)(4)(C)(i) of the Code.

      (b)     The Committee may establish such rules and regulations, not
              inconsistent with the


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<PAGE>   14


              provisions of the Plan, as it may deem necessary for the proper
              administration of the Plan, and may amend or revoke any rule or
              regulation so established. The Committee shall, subject to the
              provisions of the Plan, have full power to interpret, administer
              and construe the Plan and any instruments issued under the Plan
              and full authority to make all determinations and decisions
              thereunder including without limitation the authority to (i)
              select the Participants in the Plan, (ii) determine when Stock
              Incentives shall be granted, (iii) determine the number of shares
              to be made subject to each Stock Incentive, (iv) determine the
              type of Stock Incentive to grant, and (v) determine the terms and
              conditions of each Stock Incentive, including the exercise price,
              in the case of an Option, and (vi) approve any transaction
              involving a Stock Incentive for a Section 16 Person (other than a
              "Discretionary Transaction" as defined in SEC Rule 16b-3) so as to
              exempt such transaction under SEC Rule 16b-3; provided, that any
              transaction under the Plan involving a Section 16 Person also may
              be approved by the Board of Directors, or may be approved or
              ratified by the stockholders of the Company, in the manner that
              exempts such transaction under SEC Rule 16b-3. The interpretation
              by the Committee of the terms and provisions of the Plan and any
              instrument issued thereunder, and its administration thereof, and
              all action taken by the Committee, shall be final, binding, and
              conclusive on the Company, its stockholders, Subsidiaries, all
              Participants and employees, and upon their respective
              Beneficiaries, successors and assigns, and upon all other persons
              claiming under or through any of them.

      (c)     Members of the Board of Directors and members of the Committee
              acting under this Plan shall be fully protected in relying in good
              faith upon the advice of counsel and shall incur no liability
              except for gross or willful misconduct in the performance of their
              duties.

12.   GENERAL PROVISIONS.

      (a)     Any provision of the Plan to the contrary notwithstanding, any
              Stock Incentive issued under the Plan, including without
              limitation any Option, shall not be transferable by the
              Participant other than by will or the laws of descent and
              distribution or to a Beneficiary designated by the Participant,
              unless the instrument evidencing the Stock Incentive expressly so
              provides (or is amended to so provide) and is approved by the
              Committee; and any purported transfer of an Incentive Stock Option
              to a Beneficiary, shall be effective only if such transfer is, in
              the opinion of the General Counsel, permissible under and
              consistent with SEC Rule 16b-3 or Section 422 of the Code, as the
              case may be. Notwithstanding the foregoing, a Participant may
              transfer any Stock Incentive granted under this Plan, other than
              an Incentive Stock Option, to members of his or her immediate
              family (defined as his or her children, grandchildren and spouse)
              or to one or more trusts for the benefit of such immediate family
              members or partnerships in which such immediate family members are
              the only partners if (and only if) the instrument evidencing such
              Stock Incentive expressly so provides (or is


                                      27
<PAGE>   15



              amended to so provide) and is approved by the Committee, and the
              Participant does not receive any consideration for the transfer;
              provided that any such transferred Stock Incentive shall continue
              to be subject to the same terms and conditions that were
              applicable to such Stock Incentive immediately prior to its
              transfer (except that such transferred Stock Incentive shall not
              be further transferable by the transferee inter vivos, except for
              transfer back to the original Participant holder of the Stock
              Incentive) and provided, further, that the foregoing provisions of
              this sentence shall apply to Section 16 Persons only if the
              General Counsel determines that doing so would not jeopardize any
              exemption from Section 16 of the Exchange Act (including without
              limitation SEC Rule 16b-3) for which the Company intends Section
              16 Persons to qualify.

      (b)     Nothing in this Plan or in any instrument executed pursuant hereto
              shall confer upon any person any right to continue in the
              employment of the Company or a Subsidiary, or shall affect the
              right of the Company or a Subsidiary to terminate the employment
              of any person at any time with or without cause.

      (c)     No shares of Common Stock shall be issued or transferred pursuant
              to a Stock Incentive unless and until all legal requirements
              applicable to the issuance or transfer of such shares have, in the
              opinion of the General Counsel, been satisfied. Any such issuance
              or transfer shall be contingent upon the person acquiring the
              shares giving the Company any assurances the General Counsel may
              deem necessary or desirable to assure compliance with all
              applicable legal requirements.

      (d)     No person (individually or as a member of a group) and no
              Beneficiary or other person claiming under or through him, shall
              have any right, title or interest in or to any shares of Common
              Stock (i) issued or transferred to, or acquired by, a trust, (ii)
              allocated, or (iii) reserved for the purposes of this Plan, or
              subject to any Stock Incentive except as to such shares of Common
              Stock, if any, as shall have been issued or transferred to him.
              The Committee may (but need not) provide at any time or from time
              to time (including without limitation upon or in contemplation of
              a Change in Control) for a number of shares of Common Stock, equal
              to the number of such shares subject to Stock Incentives then
              outstanding, to be issued or transferred to, or acquired by, a
              trust (including but not limited to a grantor trust) for the
              purpose of satisfying the Company's obligations under such Stock
              Incentives, and, unless prohibited by applicable law, such shares
              held in trust shall be considered authorized and issued shares
              with full dividend and voting rights, notwithstanding that the
              Stock Incentives to which such shares relate shall not have been
              exercised or may not be exercisable or vested at that time.

      (e)     The Company and its Subsidiaries may make such provisions as they
              may deem appropriate for the withholding of any taxes which they
              determine they are required to withhold in connection with any
              Stock Incentive. Without limiting the foregoing,


                                      28
<PAGE>   16


              the Committee may, subject to such terms and conditions as it may
              impose, permit or require any withholding tax obligation arising
              in connection with the grant, exercise, vesting, distribution or
              payment of any Stock Incentive to be satisfied in whole or in
              part, with or without the consent of the Participant, by having
              the Company withhold all or any part of the shares of Common Stock
              that vest or would otherwise be distributed at such time. Any
              shares so withheld shall be valued at their Fair Market Value on
              the date of such withholding.

      (f)     Nothing in this Plan is intended to be a substitute for, or shall
              preclude or limit the establishment or continuation of, any other
              plan, practice or arrangement for the payment of compensation or
              fringe benefits to directors, officers or employees generally, or
              to any class or group of such persons, which the Company or any
              Subsidiary now has or may hereafter lawfully put into effect,
              including, without limitation, any incentive compensation,
              retirement, pension, group insurance, stock purchase, stock bonus
              or stock option plan.

      (g)     Any provision of the Plan to the contrary notwithstanding, except
              to the extent that the Committee determines otherwise, (i)
              transactions by and with respect to Section 16 Persons under the
              Plan are intended to qualify for any applicable exemptions
              provided by SEC Rule 16b-3, and (ii) transactions with respect to
              persons whose remuneration would not be deductible by the Company
              but for compliance with the provisions of Code Section
              162(m)(4)(C) are intended to comply with the provisions of Code
              Section 162(m)(4)(C). The Plan is also intended to give the
              Committee the authority to award Stock Incentives that qualify as
              performance-based compensation under Code Section 162(m)(4)(C) as
              well as Stock Incentives that do not so qualify. Every provision
              of the Plan shall be administered, interpreted and constructed to
              carry out the foregoing intentions and any provision that cannot
              be so administered, interpreted and construed shall to that extent
              be disregarded.

      (h)     By accepting any benefits under the Plan, each Participant, and
              each person claiming under or through him, shall be conclusively
              deemed to have indicated his or her acceptance and ratification
              of, and consent to, all provisions of the Plan and any action or
              decision under the Plan by the Company, its agents and employees,
              and the Board of Directors and the Committee.

      (i)     The validity, construction, interpretation and administration of
              the Plan and of any determinations or decisions made thereunder,
              and the rights of all persons having or claiming to have any
              interest therein or thereunder, shall be governed by, and
              determined exclusively in accordance with, the laws of the State
              of Delaware, but without giving effect to the principles of
              conflicts of laws thereof. Without limiting the generality of the
              foregoing, the period within which any action arising under or in
              connection with the Plan must be commenced, shall be governed by
              the laws of the State of Delaware, without giving effect to the
              principles of conflicts of laws thereof,


                                      29
<PAGE>   17


              irrespective of the place where the act or omission complained of
              took place and of the residence of any party to such action and
              irrespective of the place where the action may be brought.

      (j)     The use of the masculine gender shall also include within its
              meaning the feminine. The use of the singular shall include within
              its meaning the plural and vice versa.

13.   AMENDMENT AND TERMINATION.

      The Plan may be amended by the Board of Directors, without shareholder
      approval, at any time and in any respect, unless shareholder approval of
      the amendment in question is required under Oklahoma law, the Code
      (including without limitation Code Section 422 and Proposed Treasury
      Regulation Section 1.422A9(b)(iv) thereunder), any applicable exemption
      from Section 16 of the Exchange Act (including without limitation SEC Rule
      16b-3) for which the Company intends Section 16 Persons to qualify, any
      national securities exchange or system on which the Stock is then listed
      or reported, by any regulatory body having jurisdiction with respect to
      the Plan, or under any other applicable laws, rules or regulations. The
      Plan may also be terminated at any time by the Board of Directors. No
      amendment or termination of this Plan shall adversely affect any Stock
      Incentive granted prior to the date of such amendment or termination
      without written consent of the Participant.


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